Independent belief for reopening under tax law fails where the officer rejects the audit objection and reopens only to preserve limitation.

Reopening under section 147(b) requires the Income-tax Officer to form his own belief, on the basis of information such as an audit note, that income has escaped assessment. Here, the recorded reasons and reply to the audit objection showed that the officer did not accept the audit view and instead treated the objection as meritless; the reopening was sought only to keep the matter alive within limitation if the department later accepted the objection. That did not satisfy the statutory requirement of an independent belief before notice under section 148, so the reassessment was held invalid and the addition in reassessment could not be sustained.

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Issues: Whether the reassessment was validly initiated under section 147(b) of the Income-tax Act, 1961 on the basis of an audit objection when the Income-tax Officer himself had concluded that no income had escaped assessment.

Analysis: An audit note may constitute information for the purpose of reopening, but section 147(b) also requires the Income-tax Officer to form his own belief, on the basis of that information, that income chargeable to tax has escaped assessment. The recorded reasons and the subsequent reply to the audit objection showed that the officer did not accept the audit view and, instead, expressly held that the objection was devoid of merit. The reopening was proposed only to protect the time limit in case the department later accepted the audit objection. That does not satisfy the statutory requirement that the belief of escapement must be formed by the officer before issuing notice under section 148.

Conclusion: The reassessment was invalidly initiated and the addition made in reassessment could not be sustained; the assessee succeeds on this issue.

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